Revolutionising the Proof of Stake — rTokens

The world is driven by innovations which are geared to making new or already existing processes more efficient. This time we would be looking at the rToken and how StaFi Protocol’s innovation is poised to make the staking process more rewarding and as a result, networks more secure. What, then, is the rToken?

rToken

rToken is the staked representative token of staked assets on StaFi Protocol. This might be a little too ambiguous so let’s break it down a little. When a user stakes, his/her assets are locked and this results in a loss of liquidity. The users get rewarded for staking but these rewards might not compare well to the type of rewards obtainable within the DeFi space. In order to prevent users from having the urge to unstake and seek yields in the DeFi space, StaFi protocol introduced rTokens. These rTokens are issued to stakers when they stake their assets. Let’s say a user stakes ATOM on the StaFi Protocol platform, he/she is issued rATOM in the ratio 1:1 of his staked ATOM. While the ATOM remains locked, the rATOM can be used for other processes like lending, borrowing or farming in the DeFi space, thus effectively unlocking liquidity. The benefit of the rToken cannot be overemphasized as the token holder can earn in two ways. First by receiving rewards that trickle in for staking his/her token. Secondly by using the staked representatives to venture into the DeFi space for more yield. Liquidity, now, ceases to be a problem. Let’s take a look at the features of the rToken.

Features

  1. rToken is a replica: An rToken is basically a replica of another token. A like-for-like replacement of the original asset that can function in the same way as the asset would. For now, the available assets on the StaFi protocol platform are Binance (BNB), Polygon (MATIC), Solana (SOL), Polkadot (DOT), Kusama (KSM), Cosmos (ATOM), Ethereum (ETH) and StaFi (FIS). All these have their rTokens which are rBNB, rMATIC, rSOL, rDOT, rKSM, rATOM, rETH and rFIS. The ratio between the rToken and token continues to grow as long as staking rewards are generated.
  2. Redeemable: With the rTokens, you can get back your staked assets anytime you want. It wouldn’t make sense if you couldn’t get your staked assets back. The only thing is that whenever you wish to redeem your staked assets with the rToken, you would have to wait for the unbonding period and this is set by the chain your asset is lying on.
  3. rTokens are fungible: Fungibility is a vital component. It means that the rTokens can easily be exchanged with another of like value. We know that one ATOM in Japan is one ATOM in England. It’s the same with the rTokens. They are easily exchangeable with one another and can also exist as fractions too.
  4. rTokens are tradable: You can trade your rTokens on both decentralized and centralized exchanges because they are totally liquid like the normal assets you trade. The beauty of it is that you can trade (and earn profit) while still earning staking rewards for staking the original assets.
  5. rTokens are yield generating: With the rToken, it’s all about yield opportunities. You can earn on your staked assets. You can also use the staked representatives to seek further yields in the DeFi space.
  6. rTokens are non-custodial: With the tokens on StaFi protocol, the users/holders have total control over what they can do with their assets. They can trade, borrow and redeem without taking permission from a third party.

Getting rTokens

Now we have fully understood what rTokens are, the benefits holders have for holding them and their basic features, one may begin to ask where they can get them. For now there are two ways of getting rTokens. These are

  1. Staking StaFi Protocol tokens on StaFi Protocol: When you stake these native tokens, you get issued their representative tokens (rTokens) to do whatever you want with them. The supported tokens you can get from StaFi platform are rFIS, rATOM, rMATIC, rBNB, rDOT, rKSM, rSOL and rETH.
  2. Getting the rToken on exchanges like Uniswap: Just find that exchange where your favourite rTokens are listed and make that purchase. The rDEX would soon be live as it is already on testnet. With the rDEX, you’ll be able to even swap between rTokens.

The rToken is indeed a great concept put out by the StaFi protocol team. With the rDEX, we would even see greater value for the rToken. Let’s see how long it goes towards revolutionising the Proof-of-stake Consensus mechanism by allowing users stake their assets without fear.

Contact

StaFi website: https://stafi.io

StaFi Twitter: https://twitter.com/stafi_protocol

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